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Nobody is sure if the Fintech sector will fully replace conventional banking, but one thing is certain: it’s here to stay. The old approach to finance management is becoming obsolete, as it’s not able to meet the evolving needs of consumers and businesses. What happened to bank add fundss is simple proof that users need solutions for faster money turnover and good returns. At the same time, individuals and SMEs need sources of financing that are more flexible and less bureaucratic. This is where alternative financing comes to play, and more specifically – Peer 2 Peer lending.
Building a bridge between users and loan borrowers while benefitting both sides – P2P lending is the millennial that makes the banks feel so “Gen X”. Why millennial? Because P2P is powered by tech, it’s easy, it’s quick, it’s inclusive, and you don’t need previous experience. Let us explain.
Leverage technology progress to create new opportunities
Banks are huge enterprise entities. They use software to improve their operations, but implementing new technology into a bureaucratic structure is challenging and far from quick. Unfortunately, the banking sector fails to catch up with latest tech trends and the human factor still pretty much dominates the industry. Naturally, employing hundreds and thousands of people to manage other people’s finances makes the service heavy, costly and slow to improve.
The Fintech sector made a big difference for one reason: using technology solutions to manage finances is a lot quicker, as well as more transparent for the end user. P2P lending is a great example – it’s a Fintech instrument that allows you to purchase your money knowing exactly where it goes, all the while being able to predict your returns with precision, feeling secure about your initial receivable. You can purchase small amounts, check your results every day, withdraw money whenever you want, and repurchase within a second (even automatically). Simply put, P2P lending is user-centered and you have full control over your funds. We didn’t even mention the part where you don’t have to fill countless sheets of papers to open an account. Register, go through a short compliance procedure and you’re all set.
Can banks ever match these returns?
We recently did a detailed comparison between P2P lending and bank add fundss. If you`ve read it, then you probably remember that we mentioned the achievable return rates from both sources. Achievable is not even a viable term for bank add fundss, as you have to purchase thousands upon thousands, and wait for years to get a decent profit. With P2P, you can start with as little as 10 EUR, and get as much as 15% ROI (depending on the portal you choose).
Besides offering good profit rates and a safe place to put your money, P2P portals offer high liquidity and flexibility. You can choose between loans of varying size and expected annual return with different payment plans, and unique borrower profiles. You can customize your receivable strategy however you please. If you`re feeling lazy or if you want to target a very specific borrower/loan-type, you can even stop purchasing of receivables manually altogether, and setup the auto assign mode to let the portal do everything for you.
Conclusion
User-centric financial management is impossible to achieve in traditional banking, at least in this day and age. Fintech solutions are bringing serious competition to financial markets, and even if they don’t replace conventional banks, they`ve already challenged them by pointing out what’s wrong with the current system. Surely, Fintech and P2P are here to stay and disrupt the way people think about receivables and personal savings. Maybe you too will feel like giving it a shot (even if you’re not a millennial?) – register and explore!
